Charity or social enterprise – which one is for you?

When starting out with an impact project, it is fundamental to have it clear pretty much at the beginning how your project should be carried out and what it exactly aims at.

Would a charity organization be more relevant, or does your idea fit the social enterprise model better?

What would you like to achieve, and what way of operating do you think would be most effective in your situation?

Here’s a list of 5 differences between a social enterprise and charity work. Both social enterprises and charity work are needed and important – while social enterprises can effect long-term change of existing social problems, charity work takes care ofthe present “victims” of these non-functional systems, one by one.

Role of Social Value Creation

charities exist to redistribute income from the haves to the have-nots

social entrepreneurship’s role in social value creation is to be a change agent through innovation and mutually benefit exchanges

Social Structure

charity works within give structures in society

social entrepreneurship creates opportunities for social structural change

Purpose

the purpose of charity is to alleviate immediate suffering rather than deep social change

social entrepreneurship’s purpose is to improve social conditions

Financing

charity is primarily financed through donations

social entrepreneurship is funded through a business model

Sustainability

charity sometimes can be not sustainable as it is reliant on donor funding and is a vehicle for income redistribution (Note from me: charity can also be funded through running a side business and be completely sustainable this way)

by definition, social entrepreneurship is sustainable as it uses a business model

Time Frame

charity is designed to alleviate immediate suffering, the response is quick and the impact sometimes is short lived

social entrepreneurship can be short-lived or run for decades just like any enterprise

Which way of operating will unlock the highest potential of your idea?